Dubai: Investors in the UAE were breathing comparatively easier on Wednesday after witnessing a sharp decline earlier in the week on fears of a new COVID-19 strain spreading in countries elsewhere.
The Dubai Financial Market (DFM) ended up 1.4 per cent at 2,515 points, while the Abu Dhabi Securities Exchange (ADX) was up 0.8 per cent at 5,149 points, both rebounding for a second day after recording steep losses of 3.85 per cent and 0.80 per cent, respectively, on Monday.
Investors got spooked, and markets in the emirates and the Gulf plunged on Monday after reports of a new COVID-19 strain in the UK and travel and border restrictions were imposed by multiple countries in response.
Beyond what this could all mean for the local economy, there were signs that investors were getting worried about individual sectors as well, with UAE real estate stocks coming under severe pressure. Abu Dhabi-based Aldar, which is on track to record another year of growth, felt the heat of investor jitters.
Since Saturday, over 40 countries in Europe, Asia, South America, the Caribbean and the Middle East have restricted travel from the UK and in some cases, also travel from other countries that have documented cases with the variant.
The variant has also been detected in Denmark, Netherlands and Australia, and in South Africa, a different coronavirus variant has been reported, according to the World Health Organization. Also, regions from Canada to Hong Kong suspended travel links to the UK, as well.
However, since the start of the week, stock markets – both regionally and worldwide – capped their losses, stemming derailing fears, as further reports rose that the travel bans had begun to ease in some parts like between France and the UK, which was among the first port restrictions that were imposed. However, cautious declines are still expected to be recorded in the days to come.
US and European stock futures dipped Wednesday, while Asian equities traded mostly higher. The S&P 500 futures fell as much as 0.7 per cent – which largely tracks the trends of investors worldwide – before paring most of the losses.
The approval of a stimulus package in the world's largest economy, US, helped allay worries of a further dent to the global economy from the new coronavirus strain in the UK. However, with the year winding down, so have market-related catalytic events. For the next couple of weeks investors largely expect to witness lesser than usual trading, which is a year-end norm.
